What is a fixed or pegged exchange rate?
I'm trying to understand what a fixed or pegged exchange rate is. I've heard about it in the context of currencies and financial markets, but I'm not entirely sure how it works or what its implications are.
Is pegged the same as fixed exchange rate?
I'm trying to understand the financial term 'pegged' and if it means the same thing as a 'fixed exchange rate'. Could someone clarify this for me?
Does Hong Kong have a fixed exchange rate?
I don't understand this question. Could you please assist me in answering it?
What is the difference between a fixed and free exchange rate?
Can you explain the key distinctions between a fixed and free exchange rate system? How do they differ in terms of their functioning, the role of central banks, and the level of market influence? Which one offers more stability, and which one allows for greater flexibility in response to economic changes? Additionally, what are the potential advantages and disadvantages of each system?
What are the disadvantages of a fixed exchange rate?
As an inquisitive individual delving into the nuances of finance, I must pose the question: What are the drawbacks inherent in adopting a fixed exchange rate system? Undoubtedly, such a mechanism offers stability and predictability, but are there any pitfalls that policymakers and investors should be wary of? Does it stifle economic growth, hinder monetary policy autonomy, or expose nations to external shocks? I am eager to explore the nuances and complexities of this topic further.